This character is a Other Letter and is mainly used in the Arabic script.
The glyph is not a composition. It has no designated width in East Asian texts. In bidirectional text it is written as Arabic letter from right to left. When changing direction it is not mirrored. The word that U+06C1 forms with similar adjacent characters prevents a line break inside it. The glyph can be confused with one other glyph.
The Wikipedia has the following information about this codepoint:
Gol he, also called choṭī he, is one of the two variants of the Arabic letter he/hāʾ (ه) that are in use in the Urdu alphabet, the other variant being the do-cas͟hmī he (ھ), also called hā-'e-mak͟hlūt. The letter is named for its shape in the isolated form, gol meaning "round" in Hindustani, to distinguish it from the do-cas͟hmī he, which is really a calligraphic variant of the "two-eyed" regular he in the medial position (ﻬ). Its various non-isolated forms originated in the Nastaʿlīq script or calligraphic hand, though various zigzag (medial) and hook (final) forms of hāʾ have existed before the script was developed.